We Discuss Why Symphony Holdings Limited's (HKG:1223) CEO Compensation May Be Closely Reviewed

Key Insights

• Symphony Holdings will host its Annual General Meeting on 20th of June
• Total pay for CEO Tony Cheng includes HK$2.40m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Symphony Holdings' EPS fell by 63% and over the past three years, the total loss to shareholders 20%

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The results at Symphony Holdings Limited (HKG:1223) have been quite disappointing recently and CEO Tony Cheng bears some responsibility for this. At the upcoming AGM on 20th of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Symphony Holdings

How Does Total Compensation For Tony Cheng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Symphony Holdings Limited has a market capitalization of HK$2.4b, and reported total annual CEO compensation of HK$2.6m for the year to December 2024. This was the same amount the CEO received in the prior year. In particular, the salary of HK$2.40m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations ranging from HK$1.6b to HK$6.3b, the reported median CEO total compensation was HK$3.7m. So it looks like Symphony Holdings compensates Tony Cheng in line with the median for the industry. Moreover, Tony Cheng also holds HK$1.1b worth of Symphony Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Although there is a difference in how total compensation is set, Symphony Holdings more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Symphony Holdings Limited's Growth

Over the last three years, Symphony Holdings Limited has shrunk its earnings per share by 63% per year. In the last year, its revenue changed by just 0.9%.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Symphony Holdings Limited Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in Symphony Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Symphony Holdings that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.